Exam 11: Performance Evaluation and the Balanced Scorecard

Use the information below to answer the following question(s): Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: -What is the Photocopier Division's return on investment?

Discuss two potential problems associated with decentralization.

Use the information below to answer the following question(s): Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%. -What is the First Electronics Corporation cell phone division's Economic Value Added (EVA)?

The number of warranty claims would be an example of the

All of the following are benefits of decentralization EXCEPT

Sarasota Corporation has operating income of $72,000, a profit margin of 12%, and asset turnover of 3.0. The return on investment (ROI) for Sarasota Corporation would be closest to

The financial results for one of the subunits of Factory Six Racing is presented in the partially completed performance evaluation report below. Required: 1. Complete the performance report rounding to three decimal places. 2. Based on the data presented, what type of responsibility centre is this subunit? 3. Which items should be investigated if part of management's decision criteria is to investigate all variances equal to or exceeding $5,000 and exceeding 10% ( both criteria must be met)?

Use the information below to answer the following question(s): The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year. The total assets of the Beverage Division were $1,680,000, while current liabilities were $360,000. Natural Foods Corporation's target rate of return is 9%, while its weighted average cost of capital is 7%. The effective tax rate for the company is 40%. -What is the Beverage Division's profit margin?

The manager of the Walt Disney World Resorts (a corporate division) would be in charge of a(n)

The use of return on investment (ROI) as a performance measure may lead managers to reject projects that would be profitable for the company as a whole.

Which of the following perspectives from the balanced scorecard focuses on continuing to improve and create value?

Which of the following perspectives from the balanced scorecard focuses on determining if customers are happy after the sale takes place?

A product line is generally considered a profit centre.

Use the information below to answer the following question(s): Selected financial data for the Entertainment Division of Magic Enterprises is as follows: -What is the Entertainment Division's return on investment?

The following information for Alpha Company was available for the past year: Management has a 25% target rate of return. Alpha Company's weighted average cost of capital is 17% and its effective tax rate is 32%. Calculate the EVA.